REITs Notch Biggest Gains in Nearly a Decade

Analysts Say Next Year Looks Good, Too, Despite Rates Likely to Rise

Real-estate investment trusts were among the hottest stocks of the year, propelled to their biggest gains in nearly a decade by low interest rates and an improving economy.

REITs, which own properties as diverse as office buildings, apartments and warehouses, are sensitive to changes in interest rates because many investors see them as an alternative to fixed-income investments like bonds. When interest rates fall, REITs look more attractive and vice versa.